The Labour Party has accepted its largest-ever donation—£4 million—from Quadrature Capital, a hedge fund registered in the Cayman Islands.
The donation, which comes ahead of the next general election, has sparked debate due to Quadrature’s significant investments in fossil fuels, arms manufacturers, and private healthcare. While the £4 million contribution is the sixth-largest in British political history, it has garnered attention not just for its size but for its timing.
The Electoral Commission records show that Labour received the donation on May 28, just days before the reporting window for large political donations began. This meant the donation wasn’t publicly disclosed until after Labour’s general election victory, raising questions about whether its timing was designed to avoid scrutiny during the campaign.
Paul Holden, investigative journalist and author of The Fraud, commented on the donation’s timing, saying it “fits the Starmer project’s pattern of delaying the disclosure of potentially sensitive or controversial political donations.” He noted that during Starmer’s bid to become Labour leader, the party had delayed publishing details of donations, unlike his rivals who shared donor information in real time.
Holden added, “Labour members, as a result, had no idea at the time of voting that Starmer had been funded with large donations from wealthy millionaires.”
Ties to the Financial Sector
Since Starmer became Labour leader in 2020, the party has received more than £8 million from individuals and businesses linked to the financial industry. Quadrature Capital, which has a $6 billion portfolio, had not donated to Labour before May. However, one of its senior employees, Daniel Luhde-Thompson, has personally donated over £500,000 to the party this year.
Transparency campaigners have expressed concerns about the potential influence of such large donations. Rose Whiffen, senior research officer at Transparency International UK, said, “When the public sees political parties relying on such large sums of money in donations from private sources, it understandably raises questions as to in whose interest politicians are working and can give the impression our democracy is for sale.”
Whiffen called for stricter regulations, adding, “More must be done to take this kind of big money out of politics. The new government should commit to introducing caps on individual donations to tackle this problem and restore public trust in how our democracy functions.”
Environmental and Ethical Questions
Quadrature’s donation has also raised eyebrows due to its substantial investments in controversial sectors. Despite positioning itself as a champion of climate action through donations to environmental causes, Quadrature holds shares in major fossil fuel companies, including ExxonMobil and Cenovus Energy. The firm’s latest filings with the US Securities and Exchange Commission (SEC) show it has increased its holdings in Cenovus, which was fined millions for an oil spill in the Atlantic Ocean.
Additionally, Quadrature has invested millions in arms manufacturers like Northrop Grumman and Lockheed Martin, as well as private healthcare firms and asset managers, sectors that could benefit from Labour’s proposed use of private investment for infrastructure projects.
Green Party co-leader Zack Polanski criticised the donation, stating, “Far from being the party in service of working people, Starmer’s Labour Party seems indebted to the bankers and bosses who profit from pillaging our public services and our planet.”
Polanski called for reforms, arguing, “Simply ‘following the rules’ and declaring donations isn’t enough to cast aside the doubts that the main parties have their loyalties tested by big donors. It’s time to implement strict rules on funding political parties, including a cap on how much any individual or business can donate to politics.”
Labour’s Response
Labour has yet to respond directly to questions regarding the timing of the donation or the optics of accepting money from a hedge fund registered in a well-known tax haven. However, Quadrature defended its donation, stating it was “values-based” and motivated by Labour’s commitment to climate action and social equity.
In a statement, the firm said, “We came to the view that a UK government with a commitment to the green transition of the economy would have the ability to drive change that is so urgently needed. This was a values-based donation, not a political donation, as Quadrature Capital Ltd remains non-partisan and apolitical.”
Despite this, critics remain wary. Robert Palmer, director of Tax Justice UK, questioned Quadrature’s Cayman Islands registration, saying, “Any company moving to a tax haven like the Cayman Islands has questions to answer, especially when public services are desperately in need of investment and we need to fund the transition to a greener economy.”
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